-An❝interest-only" mortgage is made for $80,000 at 10percent interest for 10 years. The lender and borroweragree that monthly payments will be constant and willrequire no loan amortization.a. What will the monthly payments be?b. What will be the loan balance after 5 years?c. If the loan is repaid after 5 years, what will be the yieldto the lender?

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Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A borrower made a constant payment mortgage loan 8 years ago for $400,000 at 12 percent interest for 30 years. 1. What is the monthly payment? 2. What is the current loan balance? 3. Assume this is homeowner has been offered a chance for refinance for the amount at the current balance for 22 years at 10.5% interest rate. What is the monthly payment if the homeowner chooses to refinance? 4. If the origination fees and closing costs are $25,500, and the costs are not financed by the lender. What is the effective cost of refinancing? Should this homeowner refinance? 5. If this homeowner plans to sell the house in 5 years, should this homeowner refinance (show your answer with the effective annual rate)? use excel to get the answers and show the formulas
Solve all three parts Q) Suppose you decide to take out the $1 million 30-year fixed rate mortgage at 4%. a) How much money will you pay in interest in the first month (units: dollars)? b) How much principle will you still have left to pay off after making your first 15 years worth of payments (units: thousands of dollars)? c) How much money money will you pay in interest in the 181st payment (units: dollars)?
hh. Subject :- Accounting
OLA#9.1: A 30-year, $450,000 mortgage at 3.30% compounded annually is repaid with monthly payments. a. What is the size of the monthly payments? b. Find the balance of the mortgage at the end of 7 years? c. By how much did the amortization period shorten by if the monthly payments are increased by $125 at the end of year seven?
(Ch 11 #9) There is a loan obligation to pay $1000 one year from today and another $1000 two years from today. Assuming the annual effective rate of interest is 10%, find the following: a) Macaulay duration of the loan. b) Modified duration of the loan. c) Convexity of the loan.
Use PMT = to detemine the regular payment amount, rounded to the nearest cent. The cost of a home is financed with a $200,000 20-year - nt 1+ fixed-rate mortgage at 3.5%. a. Find the monthly payments and the total interest for the loan. b. Prepare a loan amortization schedule for the first three months of the mortgage. a. The monthly payment is $E (Do not round until the final answer, Then round to the nearest cent as ccess aUbra Success Resou More
If a lender makes a simple loan of $500 for 5 years and charges 3%, then the amount that the lender receive at maturity is $ (Round your response to the nearest two decimal place) If a lender makes a simple loan of $2000 for one year and charges $90 interest, then the simple interest rate on that loan is %. (Round your response to the nearest whole number) If a borrower must repay $106.50 one year from today in order to receive a simple loan of $100 today, the simple interest on this loan is OA. 6.0% OB. 6.5% OC. 65% OD. 5.0%
1. A loan with the following terms is being made: Fixed rate, constant payment 9% interest rate $70,000 desired mortgage amount. $1,500 loan discount points paid by the buyer/borrower to the lender 25-year term, monthly payments a. Calculate the APR for federal truth-in-lending purposes (assume that the discount points are paid up front by the borrow and rolled into the loan principal). b. Do you think that the APR calculated in (a) reflects the likely return that the lender will receive over the term of the loan? List specific reasons that the lender's actual return might be different than the APR.
What is the effective yield to the lender through the date of prepayment on a $540,000 fixed rate mortgage loan fully amortizing over 30 years but paid off after 10 years if the stated annual interest rate is 6.50%, the lender charges 2.0% as an origination fee, $720 for an appraisal and $36 for a credit report and there is no prepayment penalty? -6.81% -6.71% -6.30% -6.50%
V4. A $200,000 30 year mortgage with a contract rate of 8.94%, $3000 closing costs (lawyer, appraisal, and transfer tax) and $1,000 in discount points (i.e mortgage setup fee). The monthly mortgage payment is determined to be $1600. what will be the effective borrowing rate if the borrower decides to pay off the loan at the end of year 8? Assume that the mortgage is based on monthly compounding.
am. 08.
Consider a borrower who took a loan worth 10000 at the beginning of period 1. The loan is to be repaid over 20 periods. Furthermore, assume that the interest rate is equal to 5%. How much does the borrower owe in debt at the beginning of period 3? Don't use Excel

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